The Macquarie Group Ltd (ASX: MQG) share price climbed 0.55% higher yesterday to close at $121.00 per share.

On a day when the S&P/ASX 200 Index (ASX: XJO) surged 0.83% higher, Macquarie was doing some of the heavy lifting.

Investors have been bullish on ASX bank shares in recent months but is Macquarie a solid buy in the current market?

Why the Macquarie share price has surged higher

Macquarie was not immune to the bear market we saw in February and March. In fact, the Macquarie share price fell 52.4% from 21 February to 23 March.

However, it’s been a different story since then with Macquarie’s market capitalisation rocketing to $43.5 billion.

That’s good news for current shareholders, but where does it leave prospective investors?

There are quite a few headwinds facing ASX bank shares like Macquarie right now. The effects of the 2018 Royal Commission are still lingering while the coronavirus pandemic and subsequent lockdown have presented some unique challenges for the sector.

Macquarie is somewhat different from its other major bank peers. It is more of an investment bank compared to the retail and business banks like Commonwealth Bank of Australia (ASX: CBA) and National Australia Bank Ltd. (ASX: NAB).

This creates some opportunities for the Macquarie share price to chart a different path through the current market conditions.

For instance, Macquarie’s full-year earnings provided some hope for investors.

Full year earnings

The ASX bank posted an 8% decline in net profit to $2,731 million for the 12 months ended 31 March. Macquarie was certainly not immune from the impacts of COVID-19 and announced $1,040 million worth of impairments.

But it wasn’t all bad news with Macquarie’s assets under management swelling 10% to $606.9 billion by year-end.

The Aussie bank also declared a final dividend while some of its cohorts like Westpac Banking Corp (ASX: WBC) pulled back on their dividend payments.

Importantly, the bank’s investment arms showed signs of strong performance. This included a 16% increase in net profit contribution from Macquarie Asset Management (MAM) to $2,177 million.

Of course, there were downsides to the result including an inability to provide meaningful guidance for FY21. 

However, I believe there are positive signs that Macquarie’s various business units can combine to stabilise earnings, despite the tough operating environment.

How does Macquarie compare to other ASX bank shares?

The Macquarie share price has now climbed 68% higher since 23 March.

It’s been a similar story for many ASX 200 shares with investors sending the index climbing by 36% since its March low.

However, I still think there are plenty of risks facing Macquarie and the other big banks right now. If you’re a long-term investor, I think it’s worth waiting until further results come out in October or November before jumping in.

This will provide the best picture of Macquarie’s financial position and how its various investment arms have performed in 2020.

I’ll be taking the same approach for both National Australia Bank and CommBank shares. National Australia Bank’s share price is up 36.6% since 23 March which could mean investors are a bit more skeptical about the big four compared to Macquarie.

Foolish takeaway

All the ASX banks have seen their values soar since the February/March crash but I’m not bullish enough to buy Macquarie at its current price.

More reading

• 2 ASX shares to buy for beginners
• Where to invest $5,000 in an irrational market
• Next phase of bull market could see ANZ Bank outperform Afterpay
• Is the NAB share price a strong buy?
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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I think the concept of Australian travel is going to be a pretty big deal over the foreseeable future. I don’t know about you, but right now I can’t imagine travelling anywhere else in the world, except for maybe New Zealand. Not Asia, Europe, the United States or the United Kingdom. 

In fact, even achieving the reopening of our own state borders is proving to be a thorny issue in Queensland. Not so much in my home state of WA however; we see things a little differently.

So in a world where travel is likely to be largely limited to within our own shores, which shares are likely to benefit?

Transport for Australian travel

Alliance Aviation Services Ltd (ASX: AQZ) has been one of the real workhorses of the coronavirus pandemic and looks set to emerge on the other side a better positioned company. Alliance saw increased demand for its charter flights during the lockdown period. In addition, the company recorded increases in its fly-in-fly-out flight volumes, something it has nurtured as a core service offering.

Yet, it is Alliance’s recent award of flights to the Whitsundays by the Queensland Government that really tells the tale.  Alliance Airlines is structured as a nimble organisation with a low cost base. If we do have to live only with domestic tourism for a while, I believe the company will prosper. Conversely, a company like Qantas Airways Limited (ASX: QAN) is just too big to survive on local flights alone.

Furthermore, the company has recently completed a successful $91.9 million share placement which will see it well positioned to take advantage of growth opportunities whilst maintaining a strong balance sheet.  

Car parts and accessories

Bapcor Ltd (ASX: BAP) is the Asia Pacific’s leading provider of vehicle parts, accessories, equipment, and services. Some of its well known brands include Autobarn and Midas. It stands to reason that if travel within Australia becomes an increasing trend, many of us will choose to get where we’re going by car. 

Bapcor has grown its sales by an average of 14.9% every year for 6 years. In addition, the company’s share price has grown by an average of ~24% each year over the same period. If the Bapcor share price continues to rise at this rate, it would take just over 3 years to double an initial investment in the company. 

Foolish takeaway

I believe the increase in domestic tourism will provide an opportunity for particular companies to shine. The big international tourism operators like Webjet Limited (ASX: WEB) and Crown Resorts Ltd (ASX: CWN) are likely to see some benefit. But I feel it will mostly be those companies that facilitate regional travel which will really enjoy the spoils of a surge in domestic tourism.

More reading

• ASX 200 finishes higher by 0.8%, Carsales share price driven up by FY20 guidance
• Top brokers name 3 ASX 200 shares to buy today
• Why G8 Education, InvoCare, Megaport, & Webjet shares are tumbling lower
• Is the Webjet share price going to crash lower?
• ASX 200 jumps almost 4%, Webjet share price soars

Motley Fool contributor Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor and Webjet Ltd. The Motley Fool Australia has recommended Crown Resorts Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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